If you held the virtual currency for a year or less before selling or exchanging it, you'll have a short-term capital gain or loss. If you held the virtual currency for more than a year before selling or exchanging it, you will have a long-term capital gain or loss. A cryptocurrency is an example of a convertible virtual currency that can be used to pay for goods and services, be digitally traded between users and exchanged for real currencies or digital assets. However, day traders who choose this accounting method have to pretend that they sold all of their assets at the current market price on the last trading day of the fiscal year and pretend to buy all the assets again when trading resumes in the new fiscal year.
While intraday cryptocurrency trading is a lucrative activity, you have to be careful about the tax implications of intraday trading. Intraday trading income tax should never be overlooked, since no matter how much profit you set aside, at the end of the day, you will have to pay the capital gains tax imposed on you by the IRS. But what is cryptocurrency intraday trading? How is it done and what are the tax implications of the tax on intraday cryptocurrency transactions? We are going to address these issues one by one. Suppose you trade for more than 30 hours a week or execute 4 to 5 intraday trades a day, you may be eligible for operator tax status (TTS).
Whether you have only made a few trades or if you have been actively trading during the pandemic, you will receive tax documents from your investment platform.